Why are Australian retailers missing out?

Why are Australian retailers missing out?

Australian shoppers are flocking back to traditional brick-and-mortar stores compared to online, but retailers are failing to capitalise on this resurgence, latest research from Monash University has found.

The latest data from Monash Business School’s Australian Consumer, Retail and Services (ACRS) research unit quarterly survey of Australian shoppers shows 65% of shoppers prefer using bricks-and-mortar stores most of the time, compared to 18% of Australians preferring to shop online.

Despite this renewed attraction to traditional shopping methods, Dr Rebecca Dare, managing director of the ACRS research unit within Monash Business School’s Department of Marketing, said Australian retailers are not maximising their in-store experience.

“We see trends overseas with empathic, human-centred design and advanced technologies that make shopping easier and/or more pleasurable, however, in Australia it’s all too common to see that in some cases the basics aren’t right – stock is piled high to the ceiling, merchandise is displayed poorly, and finding personalised customer service can be difficult,” Dr Dare said.

The current trends show Australians are shopping more frequently in 2018 than they were in 2016, but bucking the general theories, ACRS research shows that Australian shoppers are increasingly drawn to physical stores, not online channels, to make non-grocery purchases.

“We are also seeing similar trends overseas. Nearly 80% of shoppers in the USA purchased more than half of their items in-store in 2017. Australian retailers need to understand that customers want the experience that the physical store can bring. Retailers just need to provide it,” Dr Dare said.

Dr Dare said there are numerous best practice examples of overseas brands and physical stores winning on customer experience.

IKEA in the UK is discounting umbrellas on rainy days that communicates a human understanding, while providing a solution to an everyday problem. Also, Nike in the USA is using technology-enabled personalisation through the Nike Maker’s Experience, which allows shoppers to design their own custom shoes in-store.

Dr Dare said such notable examples are sparse in the Australian retail landscape and Australian retailers need to become better equipped to take advantage of the shift back to bricks-and-mortar.

“There is a return to the importance of customer experience at physical stores. Human touches and the sensory experiences of a store visit are increasingly important, particularly with millennials – who prefer to spend more money on experiences than on material things,” Dr Dare said.

“Shoppers miss the customer experience of physical stores; ‘real life’ connection with other people, touching things and trying them on is not an experience you get online.”

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